Council seeks answers on approval of Gilbert's Greektown Casino deal

Apr. 6, 2014

A provision in a 2002 development agreement between the city and Greektown requires the approval of the City Council and the mayor whenever ownership is transferred. / Kimberly P. Mitchell/Detroit Free Press

Written by

Joe Guillen and JC Reindl

Detroit Free Press Staff Writers

Quicken Loans founder Dan Gilbert may have run afoul of a city gambling regulation when he purchased the Greektown Casino-Hotel last year.

A provision in a 2002 development agreement between the city and Greektown requires the approval of Detroit City Council and the mayor whenever ownership is transferred. But neither the council nor mayor officially signed off on the purchase by Gilbert’s casino business, Rock Gaming.

Council President Brenda Jones drew attention Thursday to the apparent oversight, which the council initially flagged in August.

“We have been talking about this since last year,” Jones said at a council committee meeting. “We should be able to get some type of response of what’s going on, and know what’s going on as a body who is supposed to approve what has happened.”

A Rock Gaming representative, contacted Friday, did not provide any comment on the situation.

The development agreement dates to the era when Detroit’s three then-new casinos were preparing to build larger, permanent complexes and city officials sought control over the size and variety of amenities featured at each.

It was not clear Friday whether the failure to get city approval would have any consequences.

The Michigan Gaming Control Board approved Gilbert for a license to run Greektown last spring. Gaming board officials were not available for interviews Friday.

State law grants emergency manager Kevyn Orr broad powers normally held by the council and the mayor to fix the city’s financial crisis and provide services. Orr spokesman Bill Nowling said Orr has not approved the Greektown ownership transfer and is reviewing the matter.

A Detroit ordinance is clear about city government’s role in overseeing casino ownership.

“A development agreement may not be sold or transferred in any manner, nor may any party other than the designated developer operate a casino or casino complex pursuant to the development agreement, unless the mayor and City Council give their consent to the sale or transfer,” the law reads.

(Page 2 of 2)

A spokesman for Mayor Mike Duggan said the Law Department is reviewing the issue to determine what action the city may need to take.

The council’s research division raised questions about Gilbert’s ownership of Greektown in an August report on gaming tax revenues. At the time, according to the report, there was no record that approval from the mayor or council was ever sought.

“Technically speaking, he’s in violation of the development agreement,” David Whitaker, director of the research division, said during a September council budget committee meeting, according to a transcript of the meeting. “He’s been approved, from all indication, by the gaming control board. But there is a development agreement that controls the relationship between the owners of the casino operating in the city legally and the city itself.”

Last year, the Budget Committee requested then-Mayor Dave Bing’s office to provide a report on Greektown’s ownership. The issue was never resolved. Eventually, the committee decided to take it up this year, once the newly elected council was seated.

After Jones brought attention to the Greektown issue on Thursday, the Economic Development Committee agreed to discuss the development agreement in two weeks. The Law Department is still in discussions with Rock Gaming, which also owns two of the four Ohio casinos.

Greektown is the smallest and least profitable of Detroit’s three casinos.